Northrop's latest expansion may be tied to B-2 bomber bid

Richard Burnett, Orlando Sentinel

Northrop Grumman Corp. revealed Thursday its second major Space Coastexpansion in as many years, a move that could potentially create 1,800 high-paying jobs and provide a $500 million lift for an area still hard-hit from the end of the space-shuttle program.

The defense contractor's expansion is tied in part to its bid for the next-generation B-2 stealth-bomber contract. It is expected to add 300 jobs by 2015 to its Melbourne operation and possibly 1,500 additional jobs during the next five years, with average annual pay close to $100,000.

But much may depend on who wins the B-2 deal.

The expansion, lured in part by $20.8 million in incentive cash from Florida, comes about a year after Northrop announced it would bring 1,000 jobs mostly from New York to its aircraft-design operation next to Melbourne International Airport during the next four years.

Northrop, based in Falls Church, Va., is currently completing a 200,000-square-foot complex for that expansion, which separately drew state and local tax-break incentives of nearly $20 million.

Dubbed Project Magellan by Florida officials, Northrop's newest project involves as much as $500 million in capital investment; construction of yet another large facility of 220,000 square feet; and possibly 500,000 square feet of additional space during the next six years, according to Gov. Rick Scott.

Florida competed with a number of states for the Northrop expansion, the Governor's Office said.

"This is a huge win for families on the Space Coast," Scott said in a prepared statement. "We are excited that Northrop Grumman has decided to expand here in Florida."

The key prize in the game is Northrop's work on the next-generation B-2 stealth bomber, said U.S. Sen. Bill Nelson, who was briefed on the project by Northrop officials. Northrop makes the current B-2 at its factory in Palmdale, Calif.

"The development and assembly of America's long-range strike aircraft in Melbourne is a new beginning for the Space Coast," Nelson said in a statement.

Brevard County has lost tens of thousands of jobs since the 2007-09 recession — 9,000 alone as NASA phased out the space-shuttle program in 2011. In recent years, expansions by Northrop Grumman, jet maker Embraer of Brazil and other players in Melbourne's growing "aviation cluster" have helped offset some of those jobs.

Much of Northrop's plan, however, appears to be riding on whether it wins the lucrative next-generation stealth-bomber contract. The company is competing for the deal with a team including Lockheed Martin Corp. and Boeing Co.

The military has yet to announce a formal bid for the multibillion-dollar project.

"If Northrop Grumman is going to assemble the next B-2 in Florida, it would be a surprise," said Loren Thompson, a defense-industry consultant and analyst with the Lexington Institute think tank in Virginia. "Most observers assumed that whoever won the bomber contract would assemble it in Palmdale.''

But Thompson said the company could certainly build it at a lower cost in Florida.

"California has become the most expensive place in America to do any kind of manufacturing work," he said.

Northrop wouldn't comment on the B-2 competition but said the 300 new employees announced Thursday could work on various programs.

Northrop's expanding footprint in Melbourne has already caught the eye of potential subcontractors and vendors in Brevard.

"We hope to do business with them, and we've already initiated contact with them," said Gordon Abele, president of Melbourne-based Symetrics Industries LLC, a defense-electronics company. "We are absolutely excited that a company of the caliber of Northrop Grumman is choosing Melbourne as a home for growing their operations."

Business expansion in Melbourne often does not, however, translate well to north Brevard and the Cape Canaveral area, some business owners said.

"I'm a businessman, and I'm all for growth, but I wish some of that expansion might come a little farther north in the county," said Jim Musick, owner of La Cita Golf and Country Club in Titusville. "These workers coming to Melbourne, they'd be the kind of good, professional people we like to see come our way."

Despite the welcomed job growth at Northrop and other Brevard companies, the county is still more than 20,000 jobs below its pre-recession employment in 2006, according to Michael Slotkin, an economist at Florida Institute of Technology in Melbourne.

"We've had such minimal job growth for so many years, obviously it is a big deal when any company the size of Northrop announces an expansion," he said. "But it won't be an overnight panacea for the kind of job losses we've had.''